Economic Conditions - The equity markets are experiencing a recovery based on hopes that a government shutdown may end soon, although the situation remains at a stalemate [1] - Economic indicators such as ADP numbers have shown flat growth over the last three months, and there has been a significant increase in layoffs, indicating a halt in the job market [2][3] - The relative price performance of cyclical sectors in the S&P 500 has fallen to its lowest levels in 35 years since the government shutdown, suggesting continued weakening economic conditions [5] Inflation and Market Signals - The relative price of material stocks has plummeted since the shutdown, indicating a strong correlation with CPI inflation, and inflation-sensitive stock prices have also declined [6] - Market signals suggest a continued weakening trend since the shutdown, with expectations that the Federal Reserve will continue easing policies well into 2026 as inflation subsides [7] Investment Strategies - The current economic slowdown is expected to prompt broad easing from both monetary and fiscal authorities, which is already reflected in lower short rates, bond yields, and a weaker dollar [9] - There are signs of better performance in high beta stocks, small caps, micro caps, and international stocks, indicating potential leadership in these areas due to policy changes [10][11]

Market Outlook & Economic Trends - Market reflects anticipation of a negotiated resolution to the government shutdown in the coming weeks [3] - Weak economic data suggests the Federal Reserve will likely implement a rate cut in December [3] - Cyclical sectors of the S&P 500 have experienced a significant collapse in relative price, nearing 35-year lows, indicating weakening economic conditions since the government shutdown [5] - Material stocks have plummeted since the shutdown, correlating with CPI inflation [6] - The economy is expected to slow, leading to broad easing from both monetary and fiscal authorities [9] Investment Strategy & Market Performance - Lower rates on short rates, lower bond yields, and a weaker dollar have been observed this year, alongside faster money growth [9] - High beta stocks, small-cap and micro-cap stocks, and international stocks are showing better results, reflecting policy changes [10] - Leadership is expected to emerge in high beta, small-cap, micro-cap, and international stocks [11] Economic Indicators & Concerns - ADP numbers are flat over the last 3 months [2] - Challenger layoffs have surged recently [3] - Consumer confidence is declining significantly [3]

Investopedia / Photo Illustration by Alice Morgan / Getty Images KEY TAKEAWAYS The percentage of employees in 2024 who took out a hardship withdrawal from the retirement account more than doubled compared to 2018. The costs of emergencies also continue to rise, from unexpected car repairs and hospital stays to an increased number and severity of natural disasters. It is becoming increasingly difficult for many Americans to accumulate sufficient savings, and many struggle to afford emergency expenses ...

>> FROM NEW YORK CITY FOR OUR VIEWERS WORLDWIDE, I AM MATT MILLER. BLOOMBERG REAL YIELD STARTS RIGHT NOW. MATT: COMING UP, U.S. CONSUMER SENTIMENT HIT A THREE-YEAR LOW AS THE GOVERNMENT SHUTDOWN WEIGHS ON SPENDING WHILE THE FED'S DUAL MANDATE REMAINS IN CONTENTION, LEADING TO FURTHER DIVISION ON THE COMMITTEE.AND A GLOBAL BOND SALES HIT A RECORD AS ALPHABET ADDS FUEL TO THE BENCH ON DEBT. WE BEGIN -- BINGE ON DEBT. WE BEGIN WITH A DIVIDED FEDERAL RESERVE.>> WHAT I SEE IS A VERY WEIRD ECONOMIC CYCLE. >> THE ...

Economic Overview - U.S. consumer sentiment has reached a three-year low, influenced by high prices and the government shutdown, leading to decreased spending [5][30] - The Federal Reserve is experiencing significant division regarding monetary policy, with some members advocating for rate cuts while others believe current policies are too restrictive [2][6][7] Labor Market Insights - October saw a notable spike in job losses, marking the highest number of layoffs in seven months, particularly in the tech and warehousing sectors [4] - The labor market is showing signs of softening, with a significant moderation in job growth even before the government shutdown [9][10] Bond Market Activity - Global bond sales have hit a record, with U.S. firms, including Alphabet, leading the way in debt issuance, raising a total of $25 billion [30][29] - The fixed income market has seen strong investor returns, with total investor returns exceeding 7% for the year, marking the best performance in five years [31][23] Investment Strategies - There is a growing interest in high-yield bonds and agency mortgage-backed securities, as investors seek better returns in the current market environment [27][40] - The current market conditions are characterized by a significant amount of liquidity, which supports corporate balance sheets and investor confidence [37][38] Sector Performance - Selection is crucial in the current market, with underperformers noted in the chemical and packaging sectors, while healthcare and metals have shown positive performance [44][46] - The healthcare sector may face challenges in the upcoming year due to changes in subsidies and market dynamics [46]

Now, just so you understand. Do you remember that the Biden administration had the highest inflation in 48 years, but most people say ever recorded. Do you remember that.Right. Do you remember it. Did they have the highest inflation in 48 years. Did they.Just answer me the question. You know the answer. The answer is yes.They had the worst inflation in 48 years. We have almost no inflation. We're down now to 2% and we'll be maybe 1%.You want to always stay above 1%. Actually, you want a little tiny bit of i ...

Now, just so you understand. Do you remember that the Biden administration had the highest inflation in 48 years, but most people say ever recorded. Do you remember that.Right. Do you remember it. Did they have the highest inflation in 48 years. Did they.Just answer me the question. You know the answer. The answer is yes.They had the worst inflation in 48 years. We have almost no inflation. We're down now to 2% and we'll be maybe 1%.You want to always stay above 1%. Actually, you want a little tiny bit of i ...

Inflation Analysis - President Trump stated that inflation is at a perfect number [1]

Core Insights - The current job market is showing signs of weakness, potentially nearing the worst conditions in 50 years outside of a recession [1][2] - Employment growth appears to be close to zero, with job openings and hiring trends continuing to decline [4][5] - The GDP is projected to be around 3.6% for the current quarter, but labor market indicators are deemed more reliable for assessing economic health [8][9] Employment Trends - Confidence numbers indicate a low expected change in the unemployment rate, typically seen only during recessions [3] - Layoff notices and announcements are increasing, raising concerns about future employment stability [7] - Current employment growth metrics suggest a stagnation rather than improvement, with weak job openings and hiring [6] Economic Indicators - GDP growth appears strong at 3.6%, but is influenced by inventory changes and front-loading effects [8] - Labor market data is prioritized over GDP figures for a clearer picture of economic conditions [9] - Inflation numbers are generally positive, with expectations of a Federal Reserve rate cut in December despite uncertainties [15] Technology Impact - There is speculation that technology, particularly AI, may be impacting the labor market more quickly than previously anticipated, although current trends are largely attributed to post-pandemic conditions [11][12]

Another jobs Friday with no government data due to the shutdown. Yumish, though coming in very low, near the lowest level ever since uh the 1970s as worries begin to build about the consumer and the macro environment overall. Our next guest says we may be close to the worst jobs market in 50 years outside of recession.Let's bring in Goldman Sachs chief economist Yan Hotz talk about what data he's watching and where he sees the market going from here. Yan, it's good to see you. Happy Friday.>> Very good to s ...